THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG JUDGMENT JOHANNESBURG STOCK EXCHANGE LTD

Transcription

1 THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG JUDGMENT Reportable Case no: JS 398 / 15 In the matter between: RISMA VILJOEN Applicant and JOHANNESBURG STOCK EXCHANGE LTD Respondent Heard: 8, 9, 10 and 11 August 2016 Delivered: 23 September 2016 Summary: Operational requirements redundancy of position meaning of employee s position redundant Operational requirements alternative position employee required to apply for available alternatives employee refusing to apply thus exposing herself to retrenchment Operational requirements alternative positions what constitutes reasonable alternative alternatives available to employee reasonable Operational requirements procedural fairness - principles considered where

2 2 employee could avoid her own retrenchment issue of procedural fairness does not arise Operational requirements consultation process joint consensus seeking process requires proper participation in the process by both parties employee defeating objectives of process by entering the process with predecided agenda Dismissal operational requirements dismissal substantively and procedurally fair application dismissed Severance pay entitlement to Section 41(4) of BCEA considered employee unreasonably refused alternative position not entitled to severance pay JUDGMENT SNYMAN, AJ Introduction [1] This case is an unfortunate example of all that can go wrong if parties do not genuinely engage one another in a retrenchment consultation process, with a proper open mind as to one another s respective positions. An intransigent approach to retrenchments consultations more often than not has the consequence of jobs being lost, when this could have been readily avoided. This matter is a case in point. [2] The applicant has brought a case of unfair dismissal based on operational requirements to this Court. The applicant has brought this case by way of statement of claim filed on 27 May The applicant contended that her dismissal was both substantively and procedurally unfair. The respondent, on the other hand, contended that it never wanted to retrench the applicant, and that it was the applicant s own conduct that caused her ultimate retrenchment, which according to the respondent was in all respects fair. The applicant has further claimed that she be paid severance pay, which the respondent refused to pay her.

3 3 [3] The matter came before me on trial on 8 to 11 August I will now decide this matter by first setting out the relevant facts. The relevant background [4] The pertinent facts in this matter were mostly common cause. The matter was also well documented, with most of the interaction between the parties being confirmed in correspondence. Also, all the consultations were recorded and transcribed, and the transcripts were accepted by both parties to be a true and correct reflection of what transpired in the consultations. This leaves me in the fortunate position that very little in this matter turns on the credibility of witnesses, or disputed evidence. [5] The applicant commenced employment with the respondent on 1 August 2008 as a marketing officer / assistant. The applicant was promoted on 1 January 2013 to marketing manager. It was common cause that the applicant s position of marketing manager made her responsible for the disciplines of both marketing and branding, in the respondent, which was all part of her position. She initially had five subordinates reporting into her, but this was later reduced to three when two analysts that reported to her were moved out to another department in August Her post grade was at all relevant times classified as H13. [6] On 1 June 2013, Mpho Ledwaba ( Ledwaba ) was appointed by the respondent as its Head of Marketing. Ledwaba testified that towards the end of 2013, he was tasked by the respondent to investigate how to grow the respondent s possible retail market. In simple terms, his mandate was to grow the retail market where it came to individuals investing on the JSE. The research conducted in this regard showed that indeed there was a business opportunity for the respondent, in that it only managed to accumulate some investors in the last 15 years, whilst the research showed a potential market of at least 1.2 million such investors. Added to this was the recent taxation changes where certain investments would be tax free and this would also make investment on the JSE palatable for such individual investors.

4 4 [7] According to Ledwaba, going after the retail market necessitated a substantial change in the respondent s marketing focus. Up to that point, marketing had mostly been education based, meaning that the respondent presented lectures and other forms of education as to what the market was, and so attracted investors. It was not very successful. Ledwaba said that the target of new investors in terms of the new marketing focus was new investors in the first year. [8] The current marketing structure up to that point, and as referred to above, had the marketing manager dealing with all issues relating to marketing, and this included branding. Part of the new strategy was to separate marketing and branding, with a particular focus on each discipline. [9] As to the brand, it was decided that much more emphasis would be placed on the brand than had been the case before. The first step was a rebranding, followed by extensive brand roll out, and then brand maintenance and management. This would also include further development and expansion of the brand if circumstances change (the brand needed to constantly evolve). The brand had to convince the individual investor that the JSE was readily accessible and approachable. Regular brand surveys needed to be conducted on social media and other platforms. [10] Turning then to marketing going forward, there would be a complete change in focus, from mostly education based marketing to active retail marketing. This necessitated an increase in the marketing budget, from about R at that point in time to about R6 million. There would be focus on mass media advertising and more effective engagement on channel marketing through brokers and other partners. Campaigns to recruit new retail customers would also be launched. New products were to be designed and launched, especially in the context of the new tax free savings allowances. Of course, several of the existing marketing functions would remain, albeit that it would be done differently and more extensively. [11] According to Ledwaba, the existing customer database was in a poor state. It was obsolete in several respects, and was basically a list of addresses. The new focus would be to firstly clean up, and then grow this database. The database had to be an effective tool to use as a platform for direct marketing.

5 It was a much larger and detailed exercise than what had been the case before. 5 [12] As to the applicant, she started reporting directly to Ledwaba as from 1 January With the above changes in mind, the applicant was specifically tasked with the rebranding of the respondent. The applicant had in fact started with this rebranding process already in The applicant was instrumental in effecting this brand change, and as said by Ledwaba, she did an excellent job in this regard. The applicant was then also responsible to roll out this entire brand. The new brand was first introduced on 14 April [13] What the evidence showed is that before the above changes testified to by Ledwaba, and in particular in 2013, the applicant would spend about 75% of her time on marketing, and 25% of her time on branding. Because of the rebranding exercise in 2014, to which the applicant was dedicated, this percentage changed to 55% of time spent on branding and 45% on marketing. [14] With all the above in mind, the respondent s board decided that a structural change where it came to the marketing department was necessary. It was decided that separate focus and responsibility was needed in respect of branding, on the one hand, and marketing, on the other. In order to achieve the envisaged objectives, the board approved that the former position of marketing manager in essence be split into two positions, being separate marketing manager and brand manager positions. This split in the position would also affect some of the subordinates. Both these new positions would then report to Ledwaba as Head of marketing. [15] The respondent then proceeded to grade these two new positions. This grading was done by an external contractor certified in Hay grading. The grading exercise confirmed a H13 grade for both the marketing manager position and the brand manager position. The respondent then engaged Deliotte to develop a role profile for each of the positions, which included the actual job profile, the job requirements, and output requirements. And then finally, PWC was engaged to benchmark the positions against other related positions in the market. The salaries attached to both these positions would be the same. After this whole exercise, what existed was two proper new positions that needed to be filled.

6 6 [16] In simple terms, what used to be done in one position would now be done in two positions. But that was just part of it. What would further need to be done in the two positions would be a lot more, in each specific positon, as well. Because of the operational change, each discipline of brand and marketing now required its own manager focusing only on that discipline. The operational change justified these two separate positions. [17] I may at this stage add that the passing of time revealed that this view adopted by the respondent was indeed justified. When the matter came up for trial, the respondent still had separate marketing and brand managers. Not only that, the brand manager position had grown to now having two subordinates reporting to it instead of the one originally envisaged. The marketing manager position still had three subordinates reporting to it. I raise this as confirmation of the fact that there indeed two proper and viable positions created. [18] According to Ledwaba, the reality of this change would mean that the applicant s existing position of marketing manager, would be redundant. It would be replaced by these two new positions. As such, she would be affected by this intended restructuring and would need to be consulted in terms of the LRA. There were four other affected employees, along with the applicant, that needed to be consulted. [19] Ledwaba made it clear that despite this intended restructuring, the primary objective of the respondent was not to lose employees. The idea was to fill all the new positions with the existing employees, and even if there was not a proper fit of an employee in a position, a development program would be applied to the employee to as to train the employee and provide the employee with the necessary skills. But because positions were effected, the respondent felt it necessary to apply a proper process. As far as Ledwaba was concerned, the applicant was competent to fill either of the new marketing manager or branch manager positions. [20] Pursuant to following due process, the applicant was presented with a notice as contemplated by Section 189(3) as to the intended restructuring, on 14 November This notice summarized all the objectives referred to above. It was recorded that the process to follow was aimed at avoiding any

7 7 retrenchments. The applicant was informed of the splitting of the positions, as aforesaid, and that all five positions in the marketing department were affected. It was proposed that selection for placement in the new positions took place on the basis that employees apply for the positions they wanted and then be interviewed by a panel and be placed in a position commensurate to skills and experience. [21] The Section 189(3) notice was handed over following a detailed presentation on 14 November 2014, conducted by Ledwaba, and as supported by a slide show. In this presentation, the new marketing strategy was fully explained. It was explained why the change was necessary. The strategy on how the change was to be rolled out was explained. The new structure was also explained. [22] It was undisputed that a number of consultations were held between the applicant and the respondent, the first being on 18 November 2014 and the final being on 9 January Each consultation will be individually dealt with hereunder. But what must be said, at this stage, is that the applicant approached each consultation on the basis of a specific modus operandae. She went into each consultation with a pre-prepared script, and only engaged in the consultations based on that script, which script was also handed to the respondent in each consultation. The applicant indicated that she was being assisted and advised throughout by what she called her legal team. In all these consultations, the respondent was represented by Ledwaba, and the human resources manager, Shyless Nkuna ( Nkuna ). [23] As stated, the first consultation with the applicant was scheduled for, and then took place on, 18 November The applicant, from the outset, was asked if she had any questions about the Section 189(3) notice and the presentation made on 14 November 2014, as well as the process going forward. The applicant immediately reverted to her script. Reading from her script, the applicant said she wanted all her questions answered in writing, first, before she was willing to consult. The applicant made submissions in support of a request that she be legally represented in the process. The applicant asked for a detailed description of the changes / new functions as between her existing position, and the new positions of marketing manager and brand

8 8 manager, as well as the job profiles relating to these new positions. The applicant further asked for the job profiles salary ranges of all available positions, and in particular the positions of marketing officer and marketing administrator. And with regard to the selection process proposed, the applicant asked for particulars as to who the members of the panel would be, what criteria would be used, and how would the criteria be scored. She finally asked for the value of the training the respondent would provide as part of its proposals in the Section 189(3) letter. [24] In response to the question about the new roles of marketing and branding, and the positions associated with this, Ledwaba on 18 November 2014 proceeded to offer a detailed explanation as to why this was needed and what was envisaged. The explanation was more or less the same as has been set out above. He asked the applicant if he had answered her question in this respect, and she said that he did. As to all the other information sought by the applicant, and in response to question by Nkuna whether the parties could consult on it in the consultation, the applicant answered that she required the answers in writing first before she would consult. [25] Ledwaba however did indicate to the applicant that she needed to indicate which positions she was interested in, as well as her order of preference, so this could be dealt with. The parties also proceeded to make arrangements as to when the questions would be answered by the respondent, as well as the date of the next consultation. [26] The respondent then answered the applicant s questions, in writing, on 21 November As to legal representation, it was indicated to the applicant that she was free to consult a lawyer, but the respondent had no obligation to consult with a lawyer on her behalf and declined to do so. The reason for the two new positions as well as the focus of each position was explained. As to the information on the more junior positions the applicant wanted, the respondent stated that this would be consulted on at the appropriate time should the need arise, as it had concerns whether this would even be viable alternatives for the applicant, considering the diminution in level and status.

9 9 [27] The applicant s questions as to the interview panel, the criteria used, and how it would be scored, were also answered. The applicant was informed that it was not possible to provide her with the value of the training at this stage, as it first had to be established of training was even needed, and if so, what training and to what extent. [28] The next consultation convened on 26 November Again the applicant came with a script. The applicant confirmed that her questions from the previous consultation had been answered, and then immediately proceeded to state her concerns with the process which she then read from her script. Significantly, the applicant confirmed that she fully supported the new structure and the dividing of her existing marketing manager positions into two new positions of branch manager and marketing manager. The applicant also took no issue with the rationale for the restructuring. [29] The concerns the applicant raised, as read from her script, was that she disputed the fact that she needed to apply for one of these two positions. The applicant indicated that she met the requirements of both positions. She stated that she did not understand why she needed to be subjected to an interview. She stated that she did not get the proper salary band for the new positions, which means the respondent can simply alter the positions unilaterally should she apply for it. The applicant then indicated that as far as she was concerned, and based on what she called an industry standard, the brand manager position was not the same level as marketing manager and brand managers earn less. [30] The applicant proposed that the respondent forgo the interview process and that the applicant remain in her current role as marketing manager and that this role be amended by way of negotiation with her, coupled with an undertaking not to reduce her salary or benefits. The applicant also said that she would be willing to accept an offer of a voluntary exit should the respondent not want to retain her services. The applicant did not want to consult on any of the issues she raised, but required an answer from the respondent in writing.

10 10 [31] The respondent answered in writing on 28 November The respondent recorded than an actual consultation process with the view to reach consensus, in which there was a free flow of discussion and ideas in the consultation, was far more appropriate that the current written process the applicant was insisting on. Nonetheless, the respondent did answer the issues raised by the applicant, in writing. The respondent explained that because the applicant s current marketing manager position was not the same as the new position, and her former position was redundant, she could not just stay in her existing position and needed to apply for one of the new positions. [32] The respondent explained that it never doubted the applicant s ability, competence and experience, but a proper restructuring process was required by law to be held, and this process had to be fair. According to the respondent, a fair process envisaged the applicant applying for the positions she wanted, and then be interviewed, and matched to a position. The respondent stated that the brand manager position was at the same level as the marketing manager position. The respondent made it clear that it wanted to retain the services of the applicant, that it appreciated her valuable skill and experience, and that the new structure offered her suitable alternative positions. The respondent urged the applicant to participate in the process. [33] The next consultation took place on 3 December Once again, the applicant came with a script. The respondent sought to engage with the applicant, asking whether she was interested in the marketing manager position and whether the process could go forward by way of her applying for the position. Nkuna explained to the applicant that it required a psychometric assessment of the applicant for this role as well, which would be helpful. Instead of engaging with Nkuna on what she said, the applicant then simply read her script again. The applicant remained adamant that she would not participate in a process where she would have to apply for the role of marketing manager, and that her current position must just be amended on the basis she earlier demanded. She again raised the issue of a voluntary exit package. [34] Nkuna answered saying that an exit package was not on the table, as there was a reasonable alternative for the applicant and the respondent did not want

11 11 to retrench her. Nkuna was at pains to explain that that from a salary, grade and status point of view, the applicant would not be affected should she apply for any of the two positions. Nkuna said there could be no disadvantage to the applicant in simply applying for a position in the process. Ledwaba explained it would be unfair towards other employees to have one process for the applicant, and another process for all the other employees, and reiterated that in order to be fair, the respondent must apply the same process to everyone. Nkuna explained that all other affected employees went through the same process. [35] The applicant answered that based on legal advice she received, she disagreed with what was being explained to her. The applicant maintained her earlier views. The applicant again wanted a response in writing, and did not want to consult on any of the issues in the consultation itself. [36] The respondent then answered in writing on 5 December On this occasion, it sought to place its final position with regard to the alternative positions and the selection process on record. The respondent confirmed the applicant s existing position was redundant. The respondent stated that its interview process was not unreasonable and not aimed causing the applicant embarrassment. The respondent urged the applicant to apply for one of the alternative positions available. The applicant was warned that if she missed the opportunity to apply for a position, and then be retrenched, she would not receive severance pay. It was made clear that a voluntary retrenchment option was not available to the applicant. [37] Following further written questions raised by the applicant, Nkuna answered in writing on 9 December 2014, and explained why the respondent believed psychometric tests to be appropriate as part of the selection process. Nkuna however specifically said that should any of these tests reveal deficiencies, this would not be used as a basis for disqualification of any employee, but further training and skilling of employees will be provided, to avoid any retrenchment. In short, what the respondent meant was that if it should ever be considered that there were deficiencies on the part of the applicant with regard to any of these two new positions she may apply for, this would not be

12 used to disqualify her for the position applied for, but rather be used as basis to further skill and train her. 12 [38] The next consultation convened on 10 December Again, the applicant attended script in hand. Nkuna opened by explaining exactly why the respondent believed the psychometric test would be appropriate, so as to fully inform the applicant as to this purpose when she would apply for a position, going forward. Nkuna explained the psychometric test was part of the development plan relating to employees, going forward, as well. Nkuna then asked the applicant pertinently whether she is refusing to apply for the positions. [39] The applicant once again did not engage the respondent in actual consultation. She once again simply read her script. The script read more like a legal argument as to why the process was unfair, and had little to do with consulting with the respondent with the view to reach consensus. It serves little purpose to repeat all these submissions, which are mostly incompatible with the nature of a process of consultation. The applicant maintained her view and argument that the brand manager position is a demotion, and that she simply remain in her position of marketing manager to be amended by agreement with her. The applicant even goes so far as to quote case law as to why she would be entitled to severance pay. [40] But then, and of importance, the applicant makes it clear that she will not apply for the brand manager position as she considers it to be a demotion. The applicant also makes it clear that she will not apply for the marketing manager position because she contends it is not fundamentally different from her existing position, no one else met the requirements for the position, and she was willing to amend her existing position. The applicant finally made it clear that she would not apply for any other positions. The applicant then said she was willing to engage on a voluntary exit package. This was the same position the applicant adopted form the start of the process. [41] Nkuna answered by explaining why the brand manager position was not a demotion and in fact a position on the same grade. But what Nkuna further tried to explain to the applicant was that no one was forcing her to apply for brand manager position, and she could apply for any one of the two positions

13 13 as she wished, or even both. Nkuna made it clear that the applicant however had to apply. Ledwaba explained that if the applicant applied for the brand manager position, her grade, salary and benefits would be the same as she currently enjoyed. Both Ledwaba and Nkuna then again sought to explain in detail why it was important and necessary to a fair process that the applicant must apply for the marketing manager position if she wanted it. The applicant remained firm that she would not apply for any of the two positions, for the reasons she had given, and in particular with regard to the marketing manager position, because she believed she did not have to apply. Despite fairly lengthy discussion to and fro on these issues on 10 December 2014, an impasse arose. [42] The entire situation then came to the attention of the respondent s managing director, Nicky Newton-King ( Newton-King ). Despite having no involvement in the process, Newton-King called the applicant to a meeting on 11 December 2014 to discuss the situation, as there was no intention on the part of the respondent to have to retrench the applicant. Newton-King tried to assure the applicant that there was no risk to the applicant to just participate in the process and apply for the position she wanted. Newton-King also assured the applicant that there was no reason to believe that her application would have any other outcome than a positive outcome, as the applicant was a valuable employee the respondent would like to retain. The applicant conceded in evidence that she believed this approach from Newton-King was genuine, and she left the meeting to think about what she had been told. [43] Inexplicably, and on 12 December 2014, the applicant sent an to Newton-King, simply falling back on her earlier position. The applicant raised the same arguments she raised from the outset. She was not willing to give an inch, throughout. The applicant copied the human resources director, Njabulo Mashigo ( Mashigo ) on the . [44] Mashigo answered the applicant on 12 December He expressed his concern that the applicant was not consulting in a bona fide manner but rather presenting legal argument drafted by a legal representative. Mashigo confirmed that it had been explained in detail to the applicant why the two new positions were different from her former position, which was redundant.

14 14 Mashigo further confirmed that it had been explained in detail to the applicant why she needed to participate in the process by applying for a position. Mashigo stated that the applicant was capable of fulfilling both the marketing manager and branding manager positions, and the interview process was there to determine which she was most suited to and what was needed to develop her (if needed). But of importance is that Mashigo then made a concession to try and resolve the matter with the applicant, considering the impasse that had been reached as referred to above. Whilst Mashigo reiterated the respondent s view that the applicant needed to apply and be interviewed, Mashigo nonetheless stated that the applicant would be placed, without application or interview, in the brand manager position. [45] Significantly, it was explained why the applicant was being placed in the brand manager position. The fact is that in the last two years, the applicant devoted most of her time and effort to the brand discipline and she excelled at it. She had a very current and proven track record in this regard. Ledwaba testified that from his interaction with the applicant over the last year, he was convinced that brand manager was most suited to the applicant. In simple terms, the respondent considered placement of the applicant in the brand manager position as the most viable, where it came to unilateral placement. Mashigo assured the applicant that brand manager was not a demotion. The applicant was given time to consider her position until January 2015, when she would then be placed in the brand manager position. But even in these circumstances, Mashigo still made it clear to the applicant that if she wanted the marketing manager role, all she needed to do was apply, and be interviewed. The applicant was asked to convey her intentions. [46] The applicant responded on 19 December Needless to say, nothing changed. She adopted the same position, and raised the same arguments as before. However, and this correspondence, the applicant intimated that by placing the applicant in the brand manager position, the respondent was driving at a specific outcome. The applicant proceeded to try and discredit the scope of the envisaged band manager position. But, and worse still, despite the respondent making it clear that placing her in the brand manager position without application or interview was a concession aimed at resolving the impasse, the applicant then accuses it of inconsistency in its own process.

15 15 The applicant concluded her correspondence by refusing to accept the brand manager position, refusing to apply for the marketing manager position, and leaving it up to the respondent to advise on the next steps. [47] Despite the applicant s adopted position, Mashigo tried to give it one last chance, and wrote to the applicant again on 20 December Mashigo explained that what he was concerned about is that it would seem in the consultations that the applicant understood what was being conveyed to her, but would then return with correspondence that displayed a mind closed to debate, discussion or persuasion. Mashigo pointed out that the applicant adopted a fixed position from the outset not open to any persuasion or change. Mashigo confirmed the applicant s former position was redundant, and she could apply for, and be interviewed, for either of the two new roles, but refused. [48] Mashigo made it clear that placing the applicant in the brand manager position was what the respondent considered most suitable, as a compromise, and to resolve the impasse. Mashigo confirmed the brand manager would not be a demotion and the applicant would have the same salary, benefits, grade and status as before. Mashigo confirmed that if the applicant wanted the marketing manager position, she needed to apply and be interviewed. Mashigo then drew the line in the sand so to speak. He said that when the applicant came back from leave on 9 January 2015, she had one of two options. She could either start work as brand manager, or she could apply for marketing manager. If the applicant did not accept one of these two options, she would face retrenchment without severance. [49] In line with this correspondence from Mashigo, the final consultation with the applicant then convened on 9 January This was the one and only consultation the applicant came to without a script. The respondent recapped the process to date. It was confirmed by the applicant that she still refused to accept the brand manager position, and refused to apply for the marketing manager position. The applicant was then presented with a letter of termination of employment, dated 9 January 2015, which was discussed with her. It was discussed with her why her employment was being terminated and what payments she would receive on termination of employment. It was

16 explained to her why she would not be paid severance pay. The applicant s effective date of termination of employment was 28 February [50] The applicant was not required to work out her notice, and was paid in lieu of notice. The applicant was not paid severance pay. The applicant referred an unfair dismissal dispute to the CCMA on 6 February An entitlement to severance pay dispute followed on 2 March Conciliation failed (respectively on 27 February and 7 April 2015), and both these disputes were then referred to the Labour Court, by the applicant, as aforesaid. [51] In her Labour Court statement of case, the applicant challenged the fairness of her dismissal as being both substantively and procedurally unfair and demanded reinstatement as marketing manager alternatively maximum compensation. She also demanded the payment of severance pay. I will now deal with each of these elements of the applicant s case, next. Was the dismissal substantively unfair? [52] The issue of whether a dismissal for operational requirements is substantively fair is decided by way of answering what is called a general question and a specific question. As said in Chemical Workers Industrial Union and Others v Latex Surgical Products (Pty) Ltd 1 : Whether or not there was a fair reason for the dismissal of the individual appellants relates to a general question and a specific question. The general question is whether or not there was a fair reason for the dismissal of any employees. The specific one is whether there was a fair reason for the dismissal of the specific employees who were dismissed, which in this case, happened to be the individual appellants. The question of a fair reason to dismiss the specific employees who were dismissed goes to the question of the basis upon which they were selected for dismissal whereas the other question relates to whether or not there was a reason to dismiss any employees in the first place. [53] In answering the general question first, it was apparent from the evidence of both parties in Court that the applicant never took issue with what can be said 1 (2006) 27 ILJ 292 (LAC) at para 55.

17 17 to be the rationale of the restructuring. It was accepted that the respondent was entitled to restructure in pursuit of the objectives as set out above, and that the splitting of the position of marketing manager, which position encapsulated both marketing and branding, into separate marketing manager and branding manager positions, made business sense and was operationally justified. The applicant confirmed in the consultations what she supported this new structure, and the objectives the respondent sought to achieve in terms thereof. Therefore, there exists a proper business rationale in this instance. As said Kotze v Rebel Discount Liquor Group (Pty) Ltd 2 : What we have to do is to decide whether the respondent's decision to retrench was informed and is justified by a proper and valid commercial or business rationale. If it is, then that is the end of the enquiry even if it might not have been the best under the circumstances. [54] Hindsight confirms the veracity in the respondent s restructuring. It managed, in the new structure, to secure some new customers against a target of for the first year. The position of brand manager expanded to include a further assistant to the one originally envisaged. Both positions operate at proper efficiency. There would therefore be little scope for interference in what the respondent thus sought to do, and achieve. The fact is that the general question must be answered in favour of the respondent. [55] This then leaves the specific question, being whether there was a proper reason to retrench the applicant, specifically. The crux of the case of the applicant, where it came to substantive fairness, was that her position of marketing manager had not become redundant. The applicant s case was that the new marketing manager position was substantially the same position she had been occupying, and therefore there was no obligation on her to apply for what was not a new position. According to the applicant, all the respondent needed to do was keep her in her existing position, and if the respondent wanted to make changes to that position, it should negotiate with her with the view of reaching agreement on this. As to the brand manager position, the 2 (2000) 21 ILJ 129 (LAC) at para 36.

18 applicant s case is that this position would be a demotion for her and thus should not feature in assessing whether her dismissal was fair. 18 [56] The respondent case, in simple terms, was that the position of marketing manager the applicant had occupied ceased to exist, and was thus redundant. What was formerly one position was now two distinct and separate new positions that did not exist before. The respondent accepted that the applicant would be competent to fill either of these positions, which positions were of the same grade, status, salary and benefits. There were just now two different disciplines associated with each position. According to the respondent, when the applicant consistently refused to either apply for or accept any of these two positions, which would have avoided her retrenchment, she in effect selected herself for retrenchment. [57] I will commence deciding these cases by the parties by way of answering the core question was the applicant s existing position of marketing manager rendered redundant in the new structure? In other words, was the new marketing manager position substantially the same as the old marketing manager position? In the light of the reasons to follow, I have little hesitation in concluding that the applicant s existing marketing manager position was indeed redundant in the new structure. [58] Firstly, and even on the applicant s own version, her position of marketing manager as it existed consisted of, so to speak, 75% marketing and 25% brand in And in 2014, it was 55% brand and 45% marketing. I accept that the additional brand duties in 2014 coincided with the new brand roll out, but considering what the respondent had in mind where it came to brand, going forward, brand would be a significant component of marketing in general as a standalone function. I believe that if the respondent did not split the position of marketing and branding, and then implemented the new business strategy, the applicant would have spent close on equal time in her position attending to the respective disciplines of marketing and branding. As I have touched on above, hindsight confirms this to be more or less the case. [59] In any event, if at least 25% of a position and its responsibilities are stripped out and moved to another position, it simply cannot be said that what remains

19 19 is the same position. In short, a marketing manager position attending to marketing and branding is not the same as a marketing manager position doing only marketing, especially considering that branding is a justified discipline on its own. Logic and common sense dictates this kind of conclusion. The fact that the applicant could not appreciate this, despite extensive discussion and explanation, is disturbing. It in fact shows how closed her mind was to any scenario that was not in line with her own subjective views. It has to follow that the new marketing manager position, on this basis alone, is just not the same as the applicant s existing marketing manager s position. [60] What the applicant did in the course of the consultation process was to take the position profile of the new marketing manager position she was provided with by the respondent, and compare it to what she was doing in her existing position. Based on this comparison, she then sought to argue that the new position profile contained virtually exactly the same functions as her current position. The problem with this comparison is that it completely misses the point, as Ledwaba was at pains to try and explain to the applicant. [61] In fact, a simple example can be found in the increase in the budget. Ledwaba explained that to manage a budget of R is not the same as managing a budget of R6 million, which is what the new position came with. I tend to agree. Clearly there would be more responsibility in managing such a drastically increased budget, as well an increased scope in spending which must be managed. This is different to what it was before. In simple terms, by way of comparison, it can hardly be said that managing a corner shop is the same as managing a massive retail supermarket. [62] I accept that at the level of basic description, for want of better terminology, the functions of the applicant s existing position and the new marketing manager position may be quite comparable. But yet again, such an approach misses the point. Take for example what Ledwaba referred to as retail marketing. According to Ledwaba, the manner in which retail marketing took place under the applicant s existing position was by way of events and education. Now the emphasis would be on direct retail marketing, channel

20 marketing and mass advertising, with the objective of directly leading to the procurement of new customers. 20 [63] Although, in general terms, both these instances can broadly be described as retail marketing, it is not the same. This same kind of situation would also apply to the other marketing functions in the new marketing manager position. In the end, and considering that which Ledwaba fully explained, where it came to new strategy and objectives of the respondent where it came to marketing, it is in my view common sense that the job the applicant did and the job associated with the new position are different to the extent of making it a different position. [64] Ledwaba testified as to how the new marketing manager and the existing marketing manager positions differed, in particular in focus, scope, strategy and deliverables. This evidence was not really challenged, and fully corresponded with the documentary evidence and what was sought to be conveyed to the applicant in the consultations. The applicant s adopted position where it came to comparing the two positions was simply out of touch with reality, and basically her own personal and subjective opinions. [65] Accordingly, and based on the removal of the brand discipline from the existing marketing manager position, as coupled with the addition of duties and the change in focus, scope, strategy and deliverables to the new marketing manager position, I have little hesitation in accepting that the new marketing manager position was not the same position as that occupied by the applicant before the restructuring. As touched on above, the applicant actually agreed with the new business strategy of the respondent and the changes to its organizational structure as a result, and in particular, the splitting of the position. [66] I am satisfied that the applicant s position she occupied was de facto redundant. One can do little better than to draw a comparison with the following dictum from the judgment in Van Rooyen and Others v Blue Financial Services (SA) (Pty) Ltd 3 where it was held as follows: 3 (2010) 31 ILJ 2735 (LC) at para 22.

21 21 It is clear though that the regional managers would, in the restructured organization, be required to undertake additional responsibilities in relation to the expanded product lines and that the nature of their function would change. On balance, I am satisfied that the respondent has established that the difference in job content between the old and the new profiles of the regional managers' positions was sufficiently significant to justify the requirement that the applicants be assessed for their suitability for appointment to the new positions. Indeed, this appears to be the approach adopted by the applicants themselves in their memorandum addressed to Klopper on 28 December 2007 in which they appear to accept that the new profile developed by the respondent was technically exact and complete, and that the additional responsibilities that regional managers would be required to assume had the consequence of an appreciable difference in job content. In short, I am satisfied that the respondent has established a fair commercial rationale for its decision to restructure its business operations and that the change rendered the applicants redundant, at least in the sense that its decision to assess the applicants' suitability for the restructured posts was fair in the circumstances. The comparisons to the matter in casu are apparent. [67] In Plaaslike Oorgangsraad van Bronkhorstspruit v Senekal 4 the Court accepted that redundancy can result from a reorganization of a business. Similarly, and in Broll Property Group (Pty) Ltd v Du Pont and Others 5 the Court held that redundancy of job included the following: on the evidence their jobs did become redundant; it was their duties that remained and were allocated for performance by other employees within the revised structure. The aforesaid being found to be the case, the Court then concluded: 6 It followed that the three respondents were liable to be dismissed for substantive reasons unless they were appointed to other positions within the revised structure. 4 (2001) 22 ILJ 602 (SCA) at para (2006) 27 ILJ 269 (LAC) at para Id at para 26.

22 22 In simple terms, the aforesaid is what happened to the applicant. Her duties relating to branding and also marketing were allocated to other new positions, still vacant. But even her existing duties relating to marketing were different as well, as has been discussed above. There can be no doubt redundancy existed. [68] With the applicant s former position in fact being redundant, and pursuant to answering the specific question referred to above, could her retrenchment then have been avoided? Or was it the applicant s own intransigent and immovable position she adopted from the very outset that stood squarely in the way of her avoiding her own retrenchment? These questions are to be answered based on considering whether it can nonetheless be argued that the applicant could justifiably adopt the position that she simply remain in her position, without applying for the new position, and that the respondent negotiate changes to the applicant s existing position with her. This was certainly the applicant s firm view, without compromise, throughout. [69] I do not believe this was a justified position to adopt, as her former position had actually ceased to exist because of the changes made. The applicant cannot insist on remaining in a position that does not exist and then seek to negotiate changes to it. In Freshmark (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others 7 the Court said the following, which ratio can also be applied in this matter: 'An employer enters into a certain contract of employment with an employee on certain terms and conditions because he or his business or undertaking requires an employee who is prepared to work in accordance with those terms and conditions in order to meet the operational requirements of the business or undertaking. When that contract of employment as a whole or some of its terms and conditions can no longer serve or no longer suit the operational requirements of the business, that is a valid reason for the employer to terminate that contract of employment. However, if the employer has need to employ an employee on a contract of employment that is different either as a whole or only in some respects from the one that he has terminated, or wishes to terminate the employer must offer the new contract to the employee whose 7 (2003) 24 ILJ 373 (LAC) at para 25.

23 23 contract of employment has been terminated or is under threat of termination if that employee is suitable for employment on the terms of the new contract of employment. If the employee accepts the offer of a new contract of employment, he avoids being out of employment but this does not mean that his previous contract of employment remains. It does not. It is cancelled or it is amended. In either case the employment of the employee by the employer is subsequently governed by the terms and conditions of employment that are different from the terms and conditions which previously governed his employment. From this it is clear that the position is that the reason why in this case the contract of employment of the employee was terminated is that it was no longer suitable for the operational requirements of the employer, but, the reason why the employee was not employed on the new terms and conditions, and, therefore, why she became unemployed is that she rejected the appellant's offer of employment on terms and conditions of employment that, save for one new condition, were the same as the terms and conditions of employment that governed her employment. [70] Considering the actual redundancy of the applicant s existing position, and the nature of the changes made to the new marketing manager position, it is in fact the proper approach for the respondent to apply an restructuring (operational requirements) process to effect the changes it wants. It needs to finally determine the actual redundancy of the former position, the nature of the new position, and then how the new position is to be filled, in the course of a restructuring exercise under Section 189 of the LRA. The Court in Forecourt Express (Pty) Ltd v SA Transport and Allied Workers Union and Another 8 dealt with the situation where employees were offered alternative positions with a temporary employment service in circumstances where the employer, due to its business methodology, decided to declare those positions internally in the employer itself redundant. The Court held: 9 the appellant was entitled to choose the manner in which it would run its business provided that it did not change the terms and conditions of employment of the employees without their consent, and provided that, if it contemplated the dismissal of the employees, it complied with its obligations provided for in s 189 of the Act. 8 (2006) 27 ILJ 2537 (LAC). 9 Id at para 39.